* Euro hits session peak after Trichet comments
* Major currencies in ranges before jobs report Friday
* BoE ups QE by 25 bln sterling, low end of forecasts
(Updates prices, details, adds quote, changes byline)
By Steven C. Johnson
NEW YORK, Nov 5 (Reuters) - The dollar edged up against
major currencies on Thursday, recovering some recent losses, as
investors booked profits before a U.S. employment report
expected to shed more light on the economy's health.
The greenback fell in the prior session after the Federal
Reserve kept interest rates at record lows and signaled they
were likely to stay there for some time to come.
It lost more ground earlier Thursday after European Central
Bank President Jean-Claude Trichet sounded an optimistic note
about a 2010 recovery and hinted at a slow-motion exit strategy
for some emergency stimulus measures. For more, see
[]
But euro gains above $1.49 were short-lived, and analysts
said investors were largely moving to the sidelines ahead of
Friday's jobs report, expected to show a slower pace of U.S.
job losses but another rise in the unemployment rate.
"This is really going to be a serious indicator of the
relative health of the U.S. economy," said John McCarthy,
director of foreign exchange at ING Capital Markets in New
York. "Until you see jobs recover, you are not going to get any
sustainability in the economic turnaround, nor are you going to
get any reason for the Fed to tighten."
An index that measures the dollar against six major
currencies rose 0.2 percent <.DXY>, while the euro, the biggest
component of that basket, slipped 0.1 percent to $1.4860
<EUR=>. It rose as high as $1.4917 earlier in the day.
The dollar was unchanged at 90.64 yen <JPY=> and sterling
was up 0.1 percent at $1.6585 <GBP=>, off a $1.6636 peak.
Wall Street rallied, providing more evidence that the
inverse relationship between the dollar and equities was
showing signs of breaking down.
For much of the past year, the dollar has tended to fall
when stocks rise, a reflection of high risk appetite and
investor preference for stocks, commodities and higher-yield
currencies over the low-yielding dollar.
FED STILL SEEN LAGGING THE PACK
Both the ECB and Bank of England left interest rates on
hold Thursday, as the Fed did the day before, though sterling
initially rose after the bank increased its asset buying
program by less than many had expected. []
That suggested the BoE may be signaling a slow withdrawal
of emergency measures, while some analysts said the Fed's move
to cut the amount of housing agency debt it buys might also be
a nod in the same direction. []
But the Fed was still seen by many as likely to be a
laggard when it comes to normalizing policy, and that was
likely to keep the dollar under pressure.
"We are still biased for the euro to push higher," said Tom
Fitzpatrick, chief technical strategist at Citigroup in New
York. "I don't know that we'll make it to $1.60 by year end but
retesting those (2008) highs is certainly a possibility in the
early part of 2010."
Improvement in the job market is crucial to get the Fed
thinking about higher interest rates.
"I don't think anybody expects a substantial improvement in
the job market, and the unemployment rate has a serious
potential of breaking 10 percent tomorrow," said Brian Dolan,
chief strategist at Forex.com in Bedminster, New Jersey.
(Additional reporting by Wanfeng Zhou; Editing by Kenneth
Barry)
